BBB study: Gift card scam losses tripled since 2017

A study by the Better Business Bureau has found that scams involving gift cards has cost victims hundreds of millions of dollars over the past few years.

According to the study, payment by gift card is common among many scams, including government impersonators, business email compromise frauds, tech support frauds, romance scams, fake check scams, prize/sweepstakes scams and online sales of nonexistent vehicles.

The data also suggests gift card payment scams are rapidly growing, with losses having nearly tripled between 2017 and 2020 and a median loss of $700 in 2020.

The BBB says gift cards can’t be tracked as easily and don’t carry the same legal protections as credit and debit cards, making them an attractive option for scammers.

Some red flags to watch out for include:

  • Government agencies requesting payment, as no government agency will request money through a gift card.
  • Claims that paying with gift cards are safe. The BBB says providing gift card numbers is like sending cash and the money is rarely recoverable.
  • Keep the receipt when buying a gift card and the physical card, too. They may prove the card was paid for and activated later if problems arise.

Anyone who falls victim to a gift card scam should notify the issuer of the card as soon as possible, typically via the customer service number on the back of the card.